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TMI Blog2001 (10) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... n arbitration reference on 6-11-1997 in respect of the same subject matter. It was numbered as Reference No. 278 of 1997 and was withdrawn on 5-8-1998. It is subsequent to this that the fresh reference was made to the Arbitral Tribunal. As noted earlier, the material on record shows that the transactions between the parties were of the year 1991-1992. The last entry in the books of accounts was on 22-3-1993. The case of the petitioner is that there was a fire in the office of the petitioner on 1-8-1994. After reconstructing the records, it was seen that large amounts of moneys were due and payable by the respondent No. 1 to the petitioner. Petitioner after reconstructing the records on 6-11-1998 filed arbitration reference before the Bombay Stock Exchange under the rules, bye-laws and regulations of the Stock Exchange. The reference made was numbered as Reference No. 278 of 1997 and filed against one Sajjan Kumar Jagodia and his Associates. At the time the first reference was made, there was no period of limitation in respect of claims between a Member and Constituent and or vice versa. Before the Arbitral Tribunal various objections were raised in view of which, Applicant was all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d would apply to transactions in respect of which cause of action had arisen before the amendment. Section 43 of the Arbitration Act, 1996, provides that the Limitation Act, 1993 shall apply to arbitrations as it applies to proceedings in the court. However, Section 2(4) of the Act of 1996 provides that Part I, except Sub-section (1) of Section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if that other enactment were an arbitration agreement except insofar as the provisions of Part I are inconsistent with that other enactment or with any rules made thereunder. In other words, by virtue of Section 2(4), of the Arbitration Act, bye-laws of the Bombay Stock Exchange being Arbitration under an enactment would not be covered by Section 43 of the Act of 1996. This was noticed by this court in Smt. Ashalata S. Lahoti v. Hiralal Liladhar, (1999) 1 BOML R241. A similar view had been taken in Hemendra V. Shah v. Stock Exchange, Bombay (1995) 97 BOMLR 737 under the Act of 1940. It is therefore, clear considering the Act of 1996, that provisions of the Limitation Act would not apply to arbitration under the bye-laws of the Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view was followed namely that the expression "under the enactment" would include under the Act, rules or bye-laws thereunder. However, while construing the expression "inconsistent with that other enactment or with any rules made thereunder" it was held that the bye-laws if they, were inconsistent would not be protected. What would be protected will be to the extent of inconsistency under the Act and the rules. Therefore, the composition of Arbitration Tribunal which provided for two Arbitrators under the bye-laws was held to be contrary to Section 10. The basis for that conclusion was that Parliament could not abdicate its essential legislative powers. A rule making power which provides for laying of the rules framed, in Parliament has been held to be an answer to abdication of essential legislative functions. Therefore, the expression "inconsistent with that other enactment or with rules made thereunder" was within legislative competence and did not amount to abdication of essential legislative functions. A bye-law on the other hand even if it was subordinate legislation could not be so protected. Even if parliament had included the expression bye-l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under which the composition of the Arbitral Tribunal is in conformity with the provisions of Section 10. That issue thereafter insofar as that provision has become purely academic. Law however, cannot remain captive forever. Judicial consistency will require that judgments of larger benches be followed. Law including the doctrine of precedents however has not put an embargo on the thought process. While following the decision of the larger Bench the question noticed is still open for consideration at a later stage. It is in that context that I propose to discuss the judgment in Stock Exchange (supra); as a contrary view can only be persuaded by judicial persuasion; while accepting that until a contrary view is taken, I will be bound by the decision of the larger Bench to maintain judicial consistency considering the doctrine of precedents. The judgment of the Court in Kishore Jitendra Dalai v. Jay Deep Investments and Ors. 1996(3) BCR 204 proceeded on the footing that the bye-laws are statutory. The present issue really came for consideration thereunder the Bye-law of Bombay Stock Exchange. There again the omission of the word "bye-laws" in the expression "inconsis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder if inconsistent with the Arbitration Act are to prevail." It is clear from this passage that the Apex Court considering Section 46 of the Arbitration Act, 1940 has not said that inconsistent bye-laws are saved. What was saved was the inconsistent provisions of the Act and the rules. This seems not to have been noticed by the Division Bench. 5. We have once again to deal with the nature of the bye-laws as it is pursuant to these bye-laws as amended that limitation has been provided. The expression bye-laws has to be considered in the context of subordinate or delegated legislation. Subba Rao, J. in Indramani (supra) explained it is as under: "Subordinate or delegated legislation takes different forms. Subordinate legislation is divided into two main classes; namely (i) statutory rules and (ii) bye-laws or regulations made (a) by the authorities concerned with local government and (b) by persons, societies or corporations." Thus though both are subordinate legislature, they are distinct. Halsbury's Laws of England defines bye-laws as under : "A bye-law has been said to be an ordinance affecting the public, or some portion of the public, imposed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the new bye-laws came into force. Insofar as pending proceedings are considered, Section 31(s) of the Limitation Act, 1963 would apply. That would only leave cases of those who had not applied or cases like the petitioner who had withdrawn the reference to file a fresh reference or awards made on a reference before the bye-laws were amended which is set aside and a fresh reference is sought. The new Act does not provide for remitting the award as in the case of the Act of 1940. The limited power is as contained in Section 33 or Section 34(4) of the Act of 1996. Therefore, even if time is saved between the commencement of the arbitration and the date of the order of the Court under Section 43(4), a fresh reference will be barred if after excluding such time the reference is barred by limitation. It cannot be contemplated that this was the intention of Parliament when it enacted Section 43(4) or of the Bombay Stock Exchange when it framed the bye-law providing for limitation. The real issue to be considered is whether the Bombay Stock Exchange had the power to make a bye-law having retrospective effect and if it was its intention to make bye-law 252, retrospective? It may be im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e construed retrospectively so as to destroy altogether the remedy of litigant to enforce his right in a court of law. In case the remedy to enforce a vested right is altogether barred on the date when the new law comes into force without providing any breathing time to a litigant, that remedy must continue to be governed by the old law of limitation. It is true that the legislature has full powers to make law retrospectively. It is also accepted position that the law of limitation does not extinguish the right but only bars the remedy. The proposition of law may be set out as observed by Asutosh Mookerjee, J. in Manju Bibi v. Akkel Mahmud 19 Ind Ca 793 as under ; "No doubt, we find it frequently asserted in judicial decisions that a Statute of Limitation embodies merely a rule of procedure; but this statement is only generally and not universally true. The essence of the matter is that when a new Statute of limitation which shortens the period for institution of suits and comes into force the moment it becomes law is sought to be made retrospectively applicable to causes of action which have accrued earlier than the length of time prescribed, it ceases to be a statute of me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations of the Exchange; In other words, disputes prior to or subsequent to the contract. There was no provision for limitation in the contract as a term, until 29th August, 1998 except for disputes arising from Contracts between Members and Members. All that bye-law 252(2) states is that the provision of the Limitation Act, 1963, or any other law relating to limitation shall apply to arbitration under these bye-laws as they apply to the proceedings in the Court. There is nothing in the said bye-laws to hold that the said provisions will also apply to contracts which were entered into and to which contracts, bye-law 252(2) was not incorporated as a term of the contract. In other words, only those contracts which have been entered into after bye-law 252(2) came into force will the provisions of limitation become applicable as a term of the contract. They therefore, become applicable to those contracts entered into after the amendment was gazetted. This was notified by the notice dated 20th October, 1998. Bye-laws were gazetted on 29-8-1998. They would come into force from 29-8-1998. There is nothing to indicate that they would be retrospective in character. There is nothing als ..... 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